Earlier this week, regional sports operator Diamond Sports Group and Amazon announced a major partnership. Diamond represents 37 teams in the MLB, NHL, and NBA. If the deal is approved in court, local games would be added to Amazon’s Prime Video streaming service and it would enable Diamond Sports Group to emerge from bankruptcy.
Diamond secured $450 million from creditors and an additional $115 million as a new minority investment from Amazon. Diamond Sports Group also negotiated with Sinclair to settle litigation claiming the parent company had fraudulently withdrawn as much as $1.5 billion from the regional sports company. Sinclair will pay Diamond Sports Group $495 million in cash and provide management and transition services to support the restructuring and separation from the parent company. The bankruptcy agreement will also phase out the Diamond Sports naming rights deal with Bally’s following the 2024 season.
In March, Diamond Sports Group revealed it was planning to restructure due to its $8 billion debt load. Rumors about Amazon’s plans to invest in Diamond Sports Group were circulating in the middle of December. With Amazon now being involved, attorneys representing the MLB, NHL, and NBA may renegotiate these deals so nothing is finalized with Amazon Prime Video yet.
In the fall, Diamond set up wind-down plans with the NBA and NHL for broadcasting the teams in its portfolio for the 2023 and 2024 seasons and then reverted the rights back to the leagues. The MLB teams had a similar deal set up with Diamond as well.
Diamond owns the linear TV rights for 15 NBA teams, 11 NHL teams, and 11 MLB teams.
And Diamond has the streaming rights for all of its NBA and NHL teams in their portfolio but for five MLB clubs, including the Miami Marlins, Tampa Bay Rays, Detroit Tigers, Milwaukee Brewers, and Kansas City Royals.
The 15 NBA teams Diamond represents include: Atlanta Hawks, Charlotte Hornets, Cleveland Cavaliers, Dallas Mavericks, Detroit Pistons, Indiana Pacers, Los Angeles Clippers, Memphis Grizzlies, Miami Heat, Milwaukee Bucks, Minnesota Timberwolves, New Orleans Pelicans, Oklahoma City Thunder, Orlando Magic, San Antonio Spurs. The 11 NHL teams include Anaheim Ducks, Carolina Hurricanes, Columbus Blue Jackets, Dallas Stars, Detroit Red Wings, Florida Panthers, Los Angeles Kings, Minnesota Wild, Nashville Predators, St. Louis Blues, and Tampa Bay Lightning.
If a federal bankruptcy judge approves this deal, it could supersede the previous deals. Diamond executives set up these deals as a placeholder until a restructuring plan was set up. If this deal goes through, then Diamond could maintain its portfolio and negotiate different deals with the teams before a predetermined March 22 deadline for providing specifics of the restructuring plan in bankruptcy court. Diamond’s attorneys are expecting to have a restructuring plan set up well before that deadline.
KEY QUOTE:
“We are thrilled to have reached a comprehensive restructuring agreement that provides a detailed framework for a reorganization plan and substantial new financing that will enable Diamond to operate and thrive beyond 2024. We are grateful for the support from Amazon and a group of our largest creditors who clearly believe in the value-creating potential of this business. Diamond’s near-term focus will be on implementing the RSA and emerging from bankruptcy as a going concern for the benefit of our investors, our employees, our team, league and distribution partners, and the millions of fans who will continue to enjoy our broadcasts.”
— David Preschlack, CEO of Diamond
